Bond Market Update

March Losses Narrowed Despite Rising Oil Price

• U.S. Treasuries began the week with strong gains across the curve, bouncing off their lowest levels of the month ahead of tomorrow's final session of Q1. Treasuries were off to firmly higher start after a night that saw stellar gains in other sovereign debt. Longer-dated JGBs diverged from the global trend, retreating after the latest Summary of Opinions from the Bank of Japan did not show opposition to additional rate hikes. As for Iran, the situation changed little over the weekend, which was encouraging for the moment, though an elevated sense of uncertainty remains in place. Treasuries added to their starting gains in morning trade, reaching highs in the early afternoon. There was some light backtracking during the final hour, but it only lifted the 10-yr yield by two basis points off its low. Crude oil headed back above $100/bbl while the U.S. Dollar Index climbed 0.3% to 100.47, briefly touching its highest level since May.
• Yield Check:
  • 2-yr: -9 bps to 3.83%
  • 3-yr: -8 bps to 3.86%
  • 5-yr: -9 bps to 3.98%
  • 10-yr: -10 bps to 4.34%
  • 30-yr: -8 bps to 4.91%

• News:
  • President Trump said that Iran agreed to most demands that were presented last week but Iranian officials have not acknowledged this publicly.
  • President Trump speculated about seizing Iran's uranium stockpiles and Kharg island.
  • Standard & Poor's affirmed Japan's A+ rating with a Stable outlook.
  • U.S. Treasury officials will reach out to domestic and international insurance regulators to discuss systemic risk within the private credit sector.
  • Senate Banking Committee plans to complete nomination proceedings for the new Fed Chairman by April 13.
  • Companies listed in China and Hong Kong reported a 3.55% yr/yr increase in profits for fiscal 2025.
  • There was an increase in expectations for a rate hike from the Reserve Bank of Australia.
  • European Central Bank policymaker Lane said that the ECB will not hesitate to act.
  • The European Central Bank plans to simplify the approval process for changes to internal risk models of banks in the fall.
  • India's February Industrial Production was up 5.2% yr/yr (expected 4.7%; last 4.8%) and February Manufacturing Output rose 6.0% m/m (last 4.8%).
  • Eurozone's March Business and Consumer Survey fell to 96.6 from 98.2 (expected 96.5).
  • Germany's March CPI was up 1.1% m/m, as expected (last 0.2%), rising 2.7% yr/yr, as expected (last 1.9%)
  • U.K.'s February Mortgage Lending reached GBP4.84 bln (expected GBP4.10 bln; last GBP4.21 bln), February Net Lending to Individuals reached GBP6.80 bln (expected GBP5.60 bln; last GBP5.90 bln), and February Mortgage Approvals hit 62,580 (expected 61,000; last 60,250).
  • Italy's February PPI was down 0.4% m/m (last 1.5%), falling 2.7% yr/yr (last -1.6%).
  • Spain's February Retail Sales rose 2.2% yr/yr (expected 3.8%; last 3.8%).
  • Swiss March KOF Leading Indicators fell to 96.1 from 103.8 (expected 101.1).
• Commodities:
  • WTI crude: +3.4% to $102.92/bbl
  • Gold: +1.4% to $4557.00/ozt
  • Copper: UNCH at $5.50/lb
• Currencies:
  • EUR/USD: -0.4% to 1.1459
  • GBP/USD: -0.6% to 1.3183
  • USD/CNH: UNCH at 6.9164
  • USD/JPY: -0.4% to 159.64
• The Day Ahead:
  • 9:00 ET: January FHFA Housing Price Index (Briefing.com consensus 0.0%; prior 0.1%) and January S&P Case-Shiller Home Price Index (Briefing.com consensus 1.3%; prior 1.4%)
  • 9:45 ET: March Chicago PMI (Briefing.com consensus 54.8; prior 57.7)
  • 10:00 ET: February Job Openings (Briefing.com consensus 6.795 mln; prior 6.946 mln) and March Consumer Confidence (Briefing.com consensus 88.0; prior 91.2)